Hewlett-Packard Co. said that its German unit has landed a $1.4 billion, five-year outsourcing services contract with E.ON IT GmbH, the IT and telecommunications unit of the German utility giant.

Under terms of the deal, HP will manage the utility companys data center and workplace services for some 80,000 employees. The vendor also will help E.ON to integrate products and services delivered by its other key IT supplies. As part of the contract, about 1,100 E.ON employees will transfer to HP in April 2011.

The two companies have an existing relationship as HP currently provides E.ON with IT equipment, support and managed print services.

E.ON demands consistent, innovative and agile IT services to operate in a competitive global industry, said Edgar Aschenbrenner, E.ON chief information officer. HP has proven experience in large-scale IT outsourcing and a global presence, he said.

We have asked them to apply their broad experience and innovation capabilities and to act as operational integrator toward our other key partners, Aschenbrenner said.

E.ON, a $108 billion company, is one of the first major European utilities to rely on an outsider to handle its infrastructure technology and services requirements. HP said that it intends to embed technology in every aspect of the German utilitys business operations, converting it into what HP calls an Instant-On Enterprise.

HPs experience in managing complex outsourcing engagements and leading the management of multi-supplier environments will enable E.ON to focus on delivering better business results and drive growth, he said.

HPs deal with E.ON is the second large outsourcing services pact the vendor has nabbed in the past two weeks. Last week, HP garnered an $80 million, seven-year contract with TOPS Friendly Markets LLC, a 132-store supermarket chain with outlets in New York and Pennsylvania, for applications and infrastructure technology services.

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